Mercedes-Benz is currently finalizing the next generation of its stylish CLA sedan, which is set to be officially introduced next year. The new model will showcase the latest advancements in Mercedes' powertrain technology and software. Ahead of the formal reveal, the company shared images of a camouflaged CLA being tested on their track in southern Germany, driven by CEO Ola Källenius.

The upcoming CLA will be the first vehicle to utilize the new MB.OS, Mercedes' innovative operating system. This Linux-based system runs QNX in a hypervisor, ensuring that critical safety features like the dashboard display function securely. In 2023, CEO Källenius explained that while MB.UX will collaborate with third-party applications, Mercedes will maintain full control over the underlying technology.

In an exciting development, the CLA will feature Mercedes' first fully in-house electric vehicle (EV) powertrain. Previously, the company relied on partners like Bosch for the development of its EV powertrains. The CLA’s powertrain underwent extensive testing using the elegant EQXX concept vehicle, which is capable of nearly 750 miles on a single charge. In our testing of the EQXX in 2022, we gained valuable insight into Mercedes' EV engineering approach.

While the EQXX achieved an impressive efficiency of 7.44 miles per kWh (8.35 kWh/100 km), the same powertrain in a less aerodynamic EQB model returned only 5 miles per kWh (12.5 kWh/100 km), demonstrating an 80% improvement over the production EQB.

To showcase its capabilities, Mercedes took a CLA prototype to the Nardo test track in southern Italy, where it covered an impressive 2,309 miles (3,716 km) in 24 hours. This achievement broke the previous record set by Porsche in 2019 by 181 miles (291 km). During the test, the vehicle averaged 95 mph (153 km/h) while making 40 recharging stops, totaling 6 hours and 40 minutes of stationary time.

In a surprising twist, the sneak peek also revealed a new gasoline version of the CLA is on the way. As mentioned in February, Mercedes has reassessed its timeline and now believes that the transition to an all-electric lineup by 2030 may not be feasible, even in Europe. Consequently, the company aims to offer more "electrified" models alongside its EVs.

The gasoline variant of the CLA will feature a 48V mild hybrid powertrain, with the internal combustion engine sourced from Horse Powertrain Limited, a Chinese joint venture between Geely and Renault.

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In 2026, the market for secondhand electric vehicles (EVs) is expected to see a significant increase, with a projected 230% growth, as 215,000 leased cars are set to come off lease, according to data from JD Power.

If you’ve been interested in owning an electric car but found the prices too high, there’s good news ahead. A large number of EV leases are scheduled to expire in 2026, which is likely to create an oversupply in the market.

The revised IRS clean vehicle tax credit is playing a key role in this situation. This credit was updated under the Inflation Reduction Act, and while new, stricter battery sourcing rules and the requirement for final assembly in North America have reduced the number of eligible new EVs, there’s a beneficial loophole for leased vehicles. Because leased EVs are classified as commercial sales, they remain eligible for the $7,500 incentive, which can now be applied directly to the sale or leasing price of the vehicle.

In 2023, 46% of all franchise (excluding Tesla, Rivian, Vinfast, or Lucid) EV sales were leases. JD Power has observed a similar trend during the first three quarters of 2024. When including Tesla, roughly 30% of new EV sales this year were leases. In contrast, leasing of gasoline-powered vehicles has declined since the onset of the pandemic.

As a result, a shortage of used internal combustion engine (ICE) vehicles can be anticipated in 2025 and 2026. JD Power also indicates that while the number of used EVs may decrease slightly next year, by about 2%, there will be a substantial rise in 2026, as many leased EVs return to the market.

Additionally, JD Power reports positive news regarding new EV prices—they are decreasing. The average price for a new electric compact SUV, after accounting for tax credits and manufacturer incentives, is now $35,900—$12,700 less than the average price for the same vehicle class in 2022.

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